Negotiation, Negotiation, Negotiation

UK Property Investment news and comments from Mark Harrison of YourPropertyExpert.com

Yes, there will be a market crash (for both technology stocks and property)

Posted by markharrison on August 3, 2007

Yesterday, I was involved in two separate conversations, both of which ended up being about market crashes.

  • Firstly, I’d been  asked to record a CD about property investment mistakes for Nightingale Conant, and one of them was buying in the wrong way for where we are in the market cycle.

I believe that there will be another crash in both markets. I have to believe this, because I can only believe one of two things:

  •  This Government (and the other world governments, given we live in an interconnected world) have put such a firm framework for continuous growth in place that, irrespective of what happens in the future, and who gets elected, we have seen the end to boom and bust

or

  • Boom and bust is still with us – the last few years have been relatively boomy (in both UK property and technology stocks)… so bust will come at some point in the next few years, sure as day follows night (but with less predictable timing.)

There are some common things that get wheeled out in every bubble, since, well, Tulipmania in 1636-7:

  1. It’s different this time… this one tends to get used by people with strong vested interests, either because their jobs depend on it (rational denial), or because they have invested heavily in a sector and hope it’s true (irrational denial). Experience of the last few hundred years has shown that “it’s different this time” tends to get used more and more frequently, the closer we get to the crash.
  2. People will still need/use XXX (a place to live, social networking sites)… OK, but if this were “sufficient” reason, then the property crash of 1989-94 would not have happened, nor would the .com collapse of 2000. There will be winners and losers – some will go on to be worth far more, some will “tread water”, others will go down in value.
  3. XXX has a vested interest in saying there will be a crash. OK, so we do🙂 … but that doesn’t mean that I’m going to be wrong. (See also point 1)

What I can’t do is tell you two things:  I can’t say WHEN the crashes will come, nor can I say how deep they’ll be.

But, boom and bust is here to stay…

5 Responses to “Yes, there will be a market crash (for both technology stocks and property)”

  1. I think you have a really unique take on the situation. It will be interesting to see if what you are suggesting really comes to fruition.

  2. I’m sure the boom/bust cycle will be a lot faster in the technology market than it will in the UK property market.

  3. Lee said

    I agree there will certainly be a slowdown in property values a slump maybee but not necacceraly a total crash. More funds have been set up to buy residential property then ever before, at the time of writing the pound is strong £ at the moment (£1=$2.03) and there is plenty of money coming out of russia and the former soviet states. The commercial market is doing unbelivebly well ( see last weeks estage gazette auction page.. there was an interview with Barnett Ross and they had stong results in the room) but more money is made by the property investor who has correct financing and hedging in place in a crash than in booming times.

  4. The Government WILL take back control of Interest Rates, rather than leaving them with the BoE

    After my article about Market Crashes at the weekend, I’ve had some questions about my comments about Government.
    My view remains that interest rates will (again) be set by politicians at some point in the future, but my reasoning is slightly non…

  5. Ismaelssportsscene7989$anchor$basketball Betting,final Four,final Four Betting,final Four Gambling,final Four Sports Book,final Four Sportsbook,march Madness,march Madness Betting,march Madness Gambling,march Madness Sports Book,march Madness Sportsb…

    Ismaelssportsscene7989$anchor$basketball Betting,final Four,final Four Betting,final Four Gambling,final Four Sports Book,final Four Sportsbook,march Madness,march Madness Betting,march Madness Gambling,march Madness Sports Book,march Madness Sportsboo…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: